Cantwell: ‘We Can No Longer Afford to Ignore’ Chinese Monopoly on Critical Rare Earth Minerals

Cantwell chairs hearing to address shortage of strategic minerals used in clean energy technology development

WASHINGTON, D.C. – “America needs to address the growing dependence on Chinese rare earth minerals and other strategic metals,” U.S. Senator Maria Cantwell (D-WA) said Thursday at a hearing of the Senate Energy Subcommittee.

Cantwell chaired the hearing to discuss the dependence on Chinese minerals, which threatens to constrict technological advancement and economic growth in America. Rare earth minerals are vital components used in making a broad array of modern technologies, such as batteries and electronics, and in developing clean energy technologies used in electric vehicles, solar panels, and wind turbine generators. Washington state companies – such as Infinia Corporation in Kennewick – depend on a reliable supply of rare earth minerals to develop and manufacture technologies.

“[Rare earth minerals] are essential to components of many of the technologies that are part of our modern economy,” said Senator Cantwell, chair of the Energy and Natural Resources Subcommittee on Energy. “However, as last year’s subcommittee hearing established, while America was once self-sufficient in supplying the materials and finished products used in high-tech manufacturing, today we now are more reliant on imports from other nations.”

“The reality is that we can no longer afford to ignore this problem or continue to drift without a national energy strategy; we need predictable policies in this area,” Cantwell continued. “We cannot simply risk having enormous exposure to a supply-chain shortage in the area of strategic commodities, as we have in the world oil market for decades.”

The United States was once the global leader in the production of rare earth minerals. But over the past 25 years, the U.S. has become completely reliant on imports, almost entirely from China, because of China’s lower-cost operations. At the same time, China has overtaken the United States in terms of installed renewable energy capacity.

Some 97 percent of the world’s rare earth minerals are now produced in China, even though China only holds one-third of the world’s reserves. According to the Congressional Research Service, China holds 36 percent of the world’s reserves of rare earths; the U.S. holds about 13 percent, and the rest is distributed in other countries.

Rare earth supply constraints loom on the horizon for America. During the second half of last year, China cut its rare earth export quota by 72 percent. Reports have shown that China is constraining global supplies of selected rare earth elements and critical minerals in order to monopolize the manufacturing of the most advanced and efficient clean energy technologies. Furthermore, the Associated Press reported Wednesday that China is consolidating its rare earth production industry into one single company that will have a monopoly on China’s rare earth production. David Sandalow, Department of Energy Assistant Secretary for Policy and International Affairs, pointed out in his testimony that America could face supply disruptions in the next five years in the materials needed to produce four key clean energy technologies.

The three bills under consideration at today’s hearing were introduced by Senators Udall (S. 383), Hagan (S.421) and Murkowski (S.1113). The measures discussed that would address looming supply constraints range from authorizing research and development for more efficient use of critical materials, including increased collection of post-consumer materials, recycling rare earth minerals from discarded electronics, and developing substitutions for rare earth minerals; authorizing a grant program to create incentives to enhance U.S. lithium production; improving data collection and ensuring greater transparency in the strategic metal supply chains; and an examination of inefficiencies in permitting related to exploration and production of critical minerals.

In September 2010, Cantwell chaired an Energy Subcommittee hearing on rare earth minerals. (Watch a video of the September 2010 hearing.) Peter Brehm, a vice president at Infinia Corporation of Kennewick, WA, testified at the hearing and said that a disruption of the rare earth metals supply would drastically limit the company’s ability to develop and manufacture its technology products.

“The loss or disruption of the rare earth metals supply would be catastrophic to Infinia in terms of price spikes, production volume and related supply chain disruptions that would drastically limit our ability to develop and manufacture our products,” Brehm testified before the Energy Subcommittee in September 2010. “Rare earth metals are simply a necessity for the development, manufacturing and advancement of Infinia’s technology, as well as many other modern essentials.”

Watch a video of Senator Cantwell’s opening statement at the hearing.

Watch a video of Senator Cantwell’s Q&A at the hearing.